Southwest Airlines reported a loss of $231 million for the first quarter, and they’ve shared a number of actions that they’re taking to turn around their financial performance. During their earnings call they highlighted several measures they’re taking but one in particular will change what it means to fly Southwest.
- They’re dropping service to Bellingham, Washington; Cozumel, Mexico; Syracuse, New York and Houston Intercontinental (they retain their major hub at Houston Hobby). In addition they’re reducing service in Atlanta by about a third (where AirTran which they acquired was based) and Chicago O’Hare by about half (while retaining their major hub at Chicago Midway).
- There are other ways they’re reducing costs, such as lower headcount – the airline expects to be down 2,000 employees at the end of the year versus end of 2023 and down more employees next year.
- The number of seats they have to sell by utilizing aircraft more – reducing turn times at some airports and some redeye flying (I wrote that it could happen much sooner than Southwest had been saying and it does seem like it will happen sooner than the “two years” that Chief Commercial Officer Ryan Green had been talking about. In fact, Green noted that they can re-prioritize to shift the timeline. Their fleet growth, of course, is constrained by Boeing delivery delays.
But what’s really interesting, I think, are ‘new commercial initiatives’ to grow revenue. CEO Bob Jordan described adding “new attributes to our value proposition.”
In early February I wrote that I thought Southwest Airlines would add extra legroom seating and that this would require at least some pre-assigned seating.
- The airline is planning thinner seats, which creates more room in the cabin
- Southwest assured that they weren’t going to add seats into their planes. So what were they going to do with the extra space?
- Some of the seats therefore get more legroom. And to generate revenue from the initiative requires gating of at least those seats – they need advance seat assignments not open seating for those seats.
They aren’t putting in new seats that have been called “1 ply” while others wonder why they’re “catering to people like us who enjoy relaxing on slates of granite” to not make changes to the cabin configuration. This gives them space to work with to do something new.
Credit: Southwest Airlines
Credit: Southwest Airlines
United, American and Delta all report that much of their revenue now comes from customers buying premium products. Southwest CEO Bob Jordan notes that passenger preferences change – when planes aren’t full, they’re happy to buy a standard product that may give them an empty seat next to them, but on a full plane they may want to buy themselves extra space.
I wondered why Southwest’s new brand campaign promotes the airline’s advantages, but not their biggest advantage which is offering more space in regular economy than Delta, American, and United. Perhaps that’s because a new cabin configuration, in order to offer extra legroom seats, might also reduce the legroom (pitch) in the rest of the cabin down to what competitors offer.
Southwest probably doesn’t know exactly what this looks like or how it works for certain yet. They do still seem to be working on the particulars. But they’re telegraphing clearly the direction that they’re going. People want to buy a more premium product, and Southwest currently doesn’t really offer one and that means leaving money on the table.
I don’t expect Southwest to offer ‘first class’ but more space is something people want, and don’t get for free when planes are full. However I’d expect to learn more from the airline at their Investor Day in September.
“Perhaps that’s because a new cabin configuration, in order to offer extra legroom seats, might also reduce the legroom (pitch) in the rest of the cabin down to what competitors offer.”
I’ve got a bad feeling about this…
I think this is a mistake on WN’s part. If they want to go down this road, and maybe they do, just assign seats like every other airline does and sell the better ones.
For years , I have flown SW for price, free bags, nonstops and great website. As well as easy preflight changes; even able to get lower price for same flight booked and cancel for credit. My 2 issues are low value in FF program and expiration in the past. Biggest complaint is huge preboard with many cheaters.
SW already sells early boarding. If certain seats have more room, such makes early boarding more valuable and more marketable. With this in mind, SW need not “assign” seats – rather they get snapped up by people who have paid for early boarding.
Of course, if preferable seats are not assigned, the practice of “saving” seats becomes more of an issue.
How would they keep the extra room seats in the front (presumably this is where this is going) from being taken by those who remain on board when there’s an intermediate stop. I’m sure the FA’s would love to have additional seat policing duties.
On the current 737-800’s that extra inch of legroom really makes a difference particularly on mid-transcon flights like the West coast to MDW.
What ever happen to Southwest plans to start service to DFW?
@ Gary — Wow, maybe their credit card will become worth carrying. Hopefully, this will force PrimoAir to lower fares on competing routes.
SW needs to assign seats through out the cabin. This would solve some problems and add value.
-they could better monetize priority boarding and high value seats.
-add a reserve middle seat option.
-eliminate the degradation in value where/when thru pax get the premium seats.
-eliminate the pre board scams
-quicker boarding. SW boards front to back, rather then back to front like other carriers.
The biggest issue I see to them getting anything better than Greyhound bus pricing is their terrible routing/flight duration. I’m in Reno which is a cow town but they are the major carrier here with shitty routing. Getting to Cabo is sometimes through Denver (waste of fuel and travel time). Getting to Seattle only by connecting in SJC or OAK or LAS is ludicrous. Alaska is kicking their butts on the left coast.
Southwest needs to get out of markets they can’t service efficiently or they will remain Jet Blue with (thankfully) a better attitude. Devaluing their award miles every few years is not generating any loyalty either, making them just as bad as Delta, United etc.
This is why I don’t like flying SW. It’s time they implement assigned seating. If I’m flying on the Big 3, at least I can choose seats to make myself comfortable for longer duration flights. Not so with SW. Also, SW needs to partner with an Alliance or do something to make their FF program worth more. Why fly SW when I can fly others and the points count towards something more worthwhile like overseas trips or upgrades to business class.
The lack of assigned seating is my favorite thing about Southwest, as well as being an A-List member.
1. Even if I switch flights on the same day, I can just about always get a decent seat.
2. I find value in being able to sit away from people with coughs, loud people, etc.
3. I appreciate the ability to sit in the exit row for free.
If Southwest moves away from these things, I may lose my loyalty for domestic flights and switch to another carrier.
@Guflyer: That’s an excellent summary.
People who want assigned seats tend to not switch flights at the last minute, not have program status, not want an exit row, and not want control over who they sit next to. Or they won’t appreciate those benefits until assigned seating removes them.
No system is best for everyone’s preferences. Open seating works very well for me, with status and changing at the last minute on more than 20% of trips.
I know they like to tout their frequent flier program as profitable, but it has zero attraction to me, as does the credit card offering. I suspect I’m not alone. I’m not sure extra legroom will sway me.
I never saw as many miracle healings as on my last Southwest flight. People who had to be rolled onto the plane leapt out of their seats and strolled quickly to baggage claim! If they want me to pay for my seat, they had better pay too.
@sammons Once there is assigned seating, there will be no incentive to claim pre-boarding assistance. I absolutely despise the cattle call boarding which is why WN has gotten exactly 1 flight out of the 684 flights/1.4M miles I have flow in the last 12 years.
As long as some overweight obnoxious soccer mom can wave her arms over a half dozen prime seats and the first 4 rows are taken by pre-boarders they will only get my booking for direct flights when I’m traveling alone.
I participated in a very lengthy and detailed survey from Southwest where they were trying to gauge what I was willing to pay for various extras such as early boarding, seat selection, extra legroom, etc so they are definitely assessing their options.
Southwest boarding usually goes much faster than the Legacy 3 carriers – primarily because of the open seat policy and perhaps also because people may check more bags (as they fly free). So I can’t foresee SW dramatically moving away from open seating. Perhaps they can up sell a few rows with extra leg room, such as exit rows or certain designated rows (but not the majority of the plane). Passengers in these designated rows might be allowed to board BEFORE all other passengers, including those who qualify for pre-board and their false pretenders.
Reducing by 2,000 employees is going to hurt unless they can do it by buyouts and attrition.
My prediction is that because of Boeings issues limiting Southwest growth— they may make a move
to buy JetBlue and have subfleets of Airbus aircraft! Having to
Integrate B6, selling cabin premiums and assigned seating may be needed and could impact some routes??? Thoughts? Not unthinkable.
It looks like they aren’t competing well with United and Delta. You don’t cut service that much if it’s profitable.
SW needs to attract business PAX who are willing to pay a premium for service. The current SW credit card adds no value, no affiliation with another carrier, and boarding is chaotic at best.
The easiest means to attract business PAX is assigned seating in the first 2 or 3 rows with an extra inch of leg room , complementary liquor, and early boarding. SW would have had a profit instead of a loss this quarter with such a program.
Time for SW to wake up and smell the money!!
“2. I find value in being able to sit away from people with coughs, loud people, etc”
Can you explain this please? I don’t see how unassigned seats helps you sit away from those people.
“People who want assigned seats tend to not switch flights at the last minute, not have program status, not want an exit row, and not want control over who they sit next to.”
Can you elucidate on this?
With assigned seats I can confirm exit row seating 11 months in advance.
With status you can get upgraded.
Assigned seats give you full control of your seat mate.
As I say often
I only fly first class
Thus I’m guaranteed a seat next to my travel/soulmate. Nobody else will sit next to me.
If I wanted an exit row I’d just buy it.
Status doesn’t matter to me since I’m buying first anyway. But I have it.
I flew Southwest a few times.
I hated the stress of people trying to find a seat
Especially at the end of boarding when they were trying to get people to live due to separated families, and an argument that broke out over saved seats.
I love the employees
But will never fly them given lack of assigned seats
I’ll disagree with most here (and agree with a few!) that Southwest’s current clientele often value the unique “bundle of features” that differentiates them from other airlines. It’s not like folks *stumble* across Southwest fares when they’re searching Google Flights!!! Their customers are those that have sought them out for some reason. If Southwest gives us everything that makes them different, they’ll instead find themselves competing directly with UA, AA, DL, and others, and competing on what *most* customers care about, which is price.
I’m not saying Southwest is making the wrong move here; I don’t have the data to back that up. But this is certainly a risky move on their part, and I don’t see any particularly great signs that Southwest leadership recognizes the risks they’re taking to their core brand value and business model.
Assigned seating PLEASE!!
WN may very well lose some travelers if they move to assigned seating, but I believe the number of people who will START flying Southwest because of assigned seating will easily outnumber the losses.
Is it too late to beg for “club” seating to come back? 🙂 🙂 🙂
It’s about freaking time. I’d love to fly SoWest if I could get a comfy seat, early boarding, and extra leg room. I can bring my own lunch. Under no circumstances will I put up with the cattle call of unassigned seating, it’s ridiculous. I am willing to pay for a good flight, happy to read that SoWest seems to finally get it. They fly to many places I want to go, and today’s first class product on the legacy airlines is wildly overpriced. I will be following this subject CLOSELY. Appreciate the post. Seems as tho the high-end hotels with their insane room rates may soon lose their loyal guests as we segue to the hotels who offer us good service at a realistic cost. We will see.
They’ve worked their way into a corner. They have provided free bags and festival-style seating for so long that if they change that, their true customer base may revolt.
I’m not in charge but if was me I’d:
Figure out a way to cut down on pre-boarder scammers. Not sure how they can tackle that.
Do not put thin seats on planes unless they are super comfortable.
Remodel their Miami security checkpoint and hallway of despair.
Let people buy pre-boarding for a fee for PE-style seats (a lite first class)
Stop serving drinks on flights shorter than 1 hour.
Let people who checked free bags board earlier in the process.
Strictly enforce a ban all seat savers. If you don’t board with your travel mates you are out of luck.
Serve Pepsi products or both Coke and Pepsi.
Operate promo days like minor league baseball does where you get free t-shirts, bobbleheads and such on certain routes and/or days of the year. Trust me on this one.
Depart early if everyone is onboard and board earlier if the plane is already sitting there. Leisure boarding.
Reconfigure a few planes to dedicate to Hawaii routes with better interiors and more legroom to attract even more passengers on such routes.
Add a few lounges at their busiest airports.
Get a long-haul award/point partner so Southwest loyalty folks can travel to places like Europe. Even if the value isn’t great, having it has an option will let people dream and redeem.
Revamp, and increase the cost, of the Business fare into FC lite.
Expand it to (18) seats that are assignable at time of booking. Extra inch or two of pitch. Unlimited drinks. All (18) board the plane first.
If there are fewer than (18) Business fares sold, upgrade A Lister into one of the seats.
All other fares board as they usually do today.
Curious as to why WN don’t allow themselves to show up on Google search. Surely it might drive more traffic to their site and potentially generate more bookings. I doubt many people know their route network inside out, or flight timings. I rarely even think about bothering to check if WN might be an option as it’s just easier to pop in where I’m going and what days and times I need and see what comes up. The only time I went out my way to check WN was when I was in Dallas working for a few months as fares on AA to some places were astonishingly high. They weren’t any better with WN to be honest, and with even lowly gold status with AA at least I could pick a decent seat in advance.
It’s gonna be all or nothing with WN, they will either stick with unassigned seats or go to assigned like everyone else. How can you logically have both? I feel assigned is the way to go as the pre boarding is completely out of control and they can’t do anything about it; It has tarnished the few early boarding products they have.
haolenate: by “club” seating do you mean the early-Southwest “Howdy Folks!” seating where seats faced each other? All six people in those seats lost under seat stowage for personal items, and you spent the entire flight staring at the stranger across from you. Unless you were a party of six and all wanted to have a big beer fest, I don’t see the appeal of this at all. Maybe it’s because Southwest started out as a Texas airline and people just did that, but outside of 1970s Texas I don’t see this working.
I work in flight at WN and agree 100% that assigned seats are a must. It’s impossible to remain the same company that Herb started on a cocktail napkin. This is now a billion dollar airline company and the name of this game is “adapt or die.”
I just cannot see how boarding wouldn’t be faster/more efficient with assigned seats and start boarding the back of the plane first.
As a leisure traveler, I love southwest.
As a business traveler, I avoid southwest.
As a leisure traveler, I love the free bags (though “free” is a misnomer as the cost of a southwest ticket is almost never the lowest cost ticket anymore), and I accept the hunger games approach to seating.
As a business traveler, I have no need for a check-in bag, and I am willing to pay the premium to know that I am seated in front of the cabin, have room in the overhead for my carry on and have a more comfortable flying experience. If travelers were still civil and shows respect for their fellow travelers, maybe it would be different. But too many travelers are not.
If WN started assigning seats, I would consider flying them again.
If you want assigned seats, go fly another airline and don’t whine about WN’s boarding process here. You have choices. I’m A-list and I ALWAYS get an Aisle seat in the first few rows. If i have a last minute change and a C boarding card, I still board before the B’s and I just go to the first row in the second FA section, which is usually 10, so I get served more quickly, in the first round and have time for that second round sometimes.
I tried switching back to AA early this year and I never got a seat more than 3 or four rows from the back. I was in the last row on an AS 900 right next to the toilet, and every idiot who used it didn’t close the dam bifold door. That became my job. I was slamming it as loudly as I could halfway to PDX.
I can see WN offering something like upgraded/larger seats in the first few rows that people will pay for and get assigned, so they board them first and then the rest, G4 does this and I think it works for them. One thing though, once the regular boarding starts, if you have an assigned seat and missed early boarding, it should be tough luck. That will keep the stragglers from holding the plane up. Once all checked in PAX are on board, they can actually leave early. An assignee may be finishing a drink in the bar while everyone waits until the 10-min cutoff.
I disagree with the comment that business travelers will pay extra. Most employers will not pay for it so it is out of pocket.
I do agree that the extra inch in the 800’s is hugely noticeable, especially when the tray table is down. I’m little overweight in front and the 700 tray table impinges my belly where the 800 does not.
I also fly a lot and I don’t see all the masses of people cheating to get on early. one or two sometimes, but never in a wheel chair, please. A study also showed that people who board ahead of their group, on assigned carriers, or pre-board when they shouldn’t actually board fast and speed the process up. I’d cite it but It was years ago when this nonsense of assigning seats on WN came up before.
Lastly, Piss on the carriers who charge for baggage, or extra for aisle seats all throughout the aircraft. It is a money grab and they are making BILLIONS on that but if the shit hits the fan again, they will also be in line for government bailout money and adding fuel surcharges.
As a WN lifer (and someone born and raised of WN staff), I’d love to see some sort of implementation of assigned seating or an elevated product.
In today’s landscape, it wouldn’t take much for WN to end other LCC and ULCCs, and etch into the big legacies’ domestic offerings. Speaking for this specific topic, the introduction of a premium cabin would be pretty cool while not taking too much from their core clientele of group travelers and families, especially if they’re talking about keeping the same number of seats on their aircraft. WN could cordon off the first, say, three rows of a -7 and six rows of an -8 as a business class cabin (that many, since -8s are on the more “lavish” routes), offering faster WiFi and more premium entertainment offerings, *possibly* seatback entertainment, free booze and premium snacks, plus a few other bonuses. The rest of the cabin could remain open seating, while offering most of those elevated offerings for purchase.
I fly all of the US carriers, and have gotten pretty well versed in their domestic offerings; people CHOOSE WN. I feel that they could balance upgraded travel *with* their bread and butter, and this could be a step towards that. Lots of money on the table. WN was born from adaptation, and now they need to continue to adapt.